Telangana, India’s largest beer-consuming state, is rationing Kingfisher beer, one of the nation’s most popular brands, following a suspension of sales by Heineken-controlled United Breweries due to a pricing dispute.
India, the world’s eighth-largest alcohol market by volume, allows individual states to regulate alcohol pricing, as liquor sales significantly contribute to state revenues. In Telangana, alcohol is purchased by the state government and distributed to retail outlets. To address potential shortages and deter hoarding, officials are now rationing beer supplies, according to three local retailers.
"Today we received a notification from our depot stating that there is no Kingfisher beer stock left," said Madhusudhan Rao, a liquor store owner in Hyderabad, speaking to Reuters on Monday.
United Breweries, the maker of Kingfisher, cited delayed payments and the absence of government approval for price hikes since 2019–20 as reasons for halting sales to Telangana. The company claimed these issues had severely impacted its financial health.
This move highlights growing tensions within India’s $45 billion alcohol industry. Major players, including Diageo, Pernod Ricard, AB InBev, and Carlsberg, are collectively seeking approximately $466 million in unpaid dues while also grappling with regulatory challenges such as antitrust investigations.
The Telangana government has characterized United Breweries’ suspension of supplies as a "tactic" to pressure for price increases. A panel is currently reviewing the company's pricing demands. Officials, however, did not respond to requests for comment regarding the situation.
Meanwhile, supply shortages are becoming evident. Purushottam, another liquor store owner in Hyderabad, said some outlets had Kingfisher stock sufficient for just 10 days, while others might run out in two days. An industry insider confirmed that depots and retailers in Telangana would exhaust United Breweries’ products within two weeks.
United Breweries dominates Telangana’s beer market, accounting for 70% of sales in a state where 60 million 12-bottle cases are sold annually. The Brewers Association of India noted a significant disparity in beer pricing across states: in Telangana, breweries earn roughly â¹300 per case, compared to â¹500 per case in Maharashtra. Taxes and retailer margins inflate these prices, leading to consumer costs five to six times higher in most Indian states.
As beer supplies dwindle and tensions escalate, Telangana faces a critical challenge in balancing consumer demand with the brewing industry’s financial and regulatory constraints.